Attorney General for Michigan Warns against Gasoline Price Gouging

Bill Schuette, Attorney General of Michigan has released a warning that gasoline price gouging is prohibited in Michigan as several oil refineries in the Gulf of Mexico may be closed down because of Hurricane Isaac.

Gasoline prices in Michigan gained 3-cents in the past week to reach an average throughout the state of around $3.93 a gallon. That rate is higher by almost 14 cents per gallon compared to this time last year.

And yet a continued surge in Michigan’s current gasoline prices is anticipated in the coming days until the upcoming Labor Day weekend, said experts.

Patrick DeHaan, Senior Petroleum Analyst of GasBuddy.com, anticipates that stations will raise gasoline prices today by almost 10 to 35 cents per gallon before the weekend concludes, with several stations already beginning to  increase prices. DeHaan cautions that Isaac and the gloomy refining problems of the region raised wholesale prices of gasoline to their peak level this year, increasing 7 cents a gallon more compared to the level posted in March.

The price of wholesale gas, which is the amount stations pay for new gasoline shipments, just gained 35 cents a gallon, the highest one day gain in a year. The area of Iron Mountain-Kingsford saw a per gallon increase in their current gasoline prices from $3.96 to $4.29.

Although the gasoline price today is a major pinch for drivers, it is not a permanent scenario.

The situation is expected to get better in the coming weeks as these temporary issues subside. However, since prices at the pump usually fall slowly, drivers may not see any real relief until the latter parts of September.

Attorney General Schuette recently released a statement that higher gasoline prices are possible, however, the circumstances do not give anybody a reason to gouge prices.

According to the Consumer Protection Act, retailers are prohibited from excessively charging high prices for items or services sold. Moreover, anti-trust laws do not allow gasoline stations to make regional deals to fix prices.

By: Chris Termeer

Chris Termeer

Chris Termeer is an oil and gas consultant, industry commentator and analyst. His book, Fundamentals of Investing in Oil and Gas provides a comprehensive overview of all aspects of the oil and gas industry, including exploration, drilling, production, storage, transportation and refining, to name but a few.

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